5.1. SR 05-14-2001 - Laserfiche WebLink

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Transmittal Letter Apriil_23, 200 1, Water Fund Charges for services in the Water Fund increased to $755,462, a 20 percent increase. This increase is due to new customer connections and increased usage during a very dry year. In November 2OOO.orate increase of513percent was approved. Prior huthis increase, water rates had not been adjusted since 1B97, Connections charges totaled $524`085in2OOOwhich isthe equivalent uf38Dunits. The Water Fund reported anet income after transfers of$5O1.828. In 1989 the Water Fund paid $500,000 for water system expansion costs in east Elk River resulting imanet loss of$77,OQ1 Electric Fund In the last several years the Electric Utility has spent significantresouroeatuempendandimnprove its service area and also tuacquire new territory. Much ofthis expansion ksinto undeveloped areas that are beginning tosee commercial and residential growth occur atafast pace. This increased customer base should provide asignificant increase incharges for service revenue in the future. |n2DO0charges for services totaled $8.389.B4O. The cost ofpurchased power continues to be a concern as are the recent discussions on deregulation and other legislative changes that affect the electric industry. Because ofthe increased cost ofpurchase power, operating income decreased in2OOOto$1.121.O57. The Electric Fund has retained earnings of $13.492,075. The electric utility will continue to need resources to meet the growing demands to expand its service area and houpdate its existing distribution system. The City approved four bond issues in2DQ8plus anequipment certificate. A $1,275,000 improvement bond was issued to finance the Western Area Phase IV improvements. This entire issue will be repaid through special assessmenits to the benefiting properties. Additionally, atax increment issue of $800,000 was approved completing the bond financing for the East Elk River Improvement Project. This issue funds the Twin Lakes Road street construction that goes through tax increment financing district 19. Also, two refunding bonds were issued; one tnrefund the 1A89,Band 199OAtaxable general ob]igationtax increment bonds and one torefund the 1992A general obligation improvement bonds that were issued to fund the Western Area Phase I improvements. The refunded issues resulted in present value interest savings of $70,525.57. Finally, equipment certificates inthe amount of $1g8.28Owere issued tofinance public safety and public works equipment, Total debt outstanding atthe end of2OOOdecreased $7,875tu$27.O21.45D. The City's legal debt margin remaining is $14,935,904. The City has only $O12.45Oofdebt applicable tmthe debt limit. The City's direct and overlapping debt decreased $1.42B.83Gto$28.383.381. Special assessment debt accounts for 49 percent of the total outstanding debt, revenue funded debt accounts for 42 percent with the remainder being general long-term debt supported by tax levies ortax increment income. The special assessment debt may becalled ordefeamedwhenever possible with funds available from special assessment prepayments; rapid special assessment pay offs continue oedevelopment occurs innewly assessed areas. CASH MANAGEMENT All of the City's idle cash is maintained in an investment pool on a combined basis where all funds with acash balance participate inthe investment pool. The Economic Development Authority, Water Fund, and Electric Fund dunot participate inthe investment pool. Pooling cash allows for the investment of larger sums of money, which frequently results in more favorable interest rates and returns ominvestment. Each month the interest earnings are allocated toeach fund participating in the investment pool on a pro -rated basis based on each fund's ending cash balance. Xii